The short answer is yes, although there are some caveats to this.

According to the Equality Act 2010, an insurance company can’t discriminate against you for being disabled. ‘Disability’ can refer to a physical or mental condition, such as missing or impaired limbs, chronic illness or mental health conditions.

However, life insurers can refuse to cover you if they can prove that your disability will shorten your life expectancy, as this will increase the likelihood of you making a claim and will therefore be a greater risk for the company. Your disability will be viewed as a pre-existing medical condition, which can make it harder for you to be accepted for certain policies.

Higher Premiums

If you do get accepted for a life insurance policy, pre-existing medical conditions can increase the cost of your monthly premiums. This is because your disability makes you more of a risky investment for the insurance company, so they’ll want you to pay more to offset this. 

Overall, you should be able to obtain cover as a disabled person, although it could be more expensive depending on how severe the insurance company perceives your disability to be. In some cases, your application may be rejected, but the company will need to provide a reasonable explanation for this. 

Disability Discrimination

If the insurance company’s reasoning doesn’t seem to be based on relevant information, you may have a case for disability discrimination. Disability legislation, including the Equality Act 2010, protects disabled people against discrimination from insurance providers. First, you should complain to the company, and if the issue continues, you can contact the free Financial Ombudsman Service.

Everyone can benefit from the financial security that life insurance brings. This is especially true if you have dependents, a mortgage or other financial responsibilities.

Although no one wants to think about death, it’s important to seriously consider what would happen to your loved ones if you passed away. Would they be able to afford mortgage repayments? Would they be able to afford your funeral? Would your children be able to enjoy the same standard of living?

Life insurance can help you provide for your family should the worst happen. Depending on the type of policy that you take out, upon your death your beneficiaries may receive a lump sum cash payment, which could be used to cover funeral costs, mortgage repayments, other bills, education expenses, your lost income and other general living costs. 

Types of Life Insurance Policies

There are many different life insurance policies to choose from, so you’re bound to find one that suits your personal circumstances, including disabilities. Most commonly, people opt for term life insurance, which covers you for a set period of time (e.g., 20 or 30 years). If you want a guaranteed payout whenever you die, you’ll need whole-of-life insurance instead, but this type of policy is usually more expensive.

In addition, you could choose:

• Decreasing term life insurance
• Increasing term life insurance
• Joint life insurance
• Over 50s life insurance

Find out more about the different types of life insurance here.

When you apply for life cover, the medical underwriting process will begin. This is when the insurance company assesses your overall health (potentially with a medical examination) to determine whether to accept you and how high your premiums will be.

If you’re applying for life insurance for a disabled adult, the underwriting process may be more detailed. When assessing your disability, the insurance company will examine four areas:

• The severity of your disability
• Your disability’s impact on your life expectancy
• The extent to which your disability affects your daily life
• Whether your disability increases your risk of developing other conditions

Comparing Life Insurance Quotes

Each insurance company will have different underwriting procedures and will therefore assess your disability differently. 

For example, one insurance provider may deem your disability to be severe and offer higher premiums as a result, but another company could judge it as less severe and offer more affordable life insurance. 

Therefore, it’s always worthwhile to shop around and compare life insurance quotes. Online comparison sites, like Money Expert, can be a great help, or you could also look at advice from a relevant charity or consult a specialist broker who can find deals for you.

One Thing to Remember:

Never lie about or downplay your disability during the application process in an effort to save money. If the insurance company finds out you weren’t truthful, your policy will no longer be valid and your beneficiaries won’t be able to make a claim after your death. 

To make your policy more affordable, it’s better to try and improve your health in manageable ways, such as by reducing other risk factors. In particular, smoking and alcohol abuse can greatly increase the cost of your monthly premiums, so working on giving up these habits can be a huge help.

Anyone could become disabled at any point in their life through serious illness or a serious accident. If you already had life insurance before becoming disabled, make sure you check the terms and conditions of your policy to see if you’re required to inform the insurance company of these changes to your health. Different companies will have different approaches to this scenario.

You shouldn’t just cancel your policy if you’ve become permanently disabled. Since you now have a pre-existing medical condition, you could find it much harder to secure a new policy or your premiums could greatly increase depending on the severity of your condition.

No, you won’t be able to claim your life insurance payout early if you become disabled. Life insurance usually only pays out in the event of your death.

One exception to this rule is terminal illness cover, which is included in some life insurance policies. With terminal illness cover, you’ll receive your payout early if you’re diagnosed with a terminal illness that’s expected to lead to your death within around 12 months. This allows you to get your finances in order beforehand to help out your family.  

There are also other types of insurance policies that could offer you money if you become disabled. Let’s look at these below:

Life and Critical Illness Cover

If your life insurance policy includes critical illness cover, you could receive a lump sum payment if you become disabled, as long as your disability is caused by one of the covered medical conditions included in the list. Without this sort of policy, you won’t receive any kind of payout upon becoming disabled.

Critical illness cover can be bought as a standalone policy from some companies or added to your life insurance (life and critical illness cover). By giving you a lump sum of cash if you’re seriously ill or injured, this policy can help you cover living costs and support yourself and your family if you’re no longer able to work. 

Disability Insurance

Disability insurance, which could be included with an income protection insurance policy, is another policy that provides financial support if you can no longer work due to a disability. 

However, whilst critical illness cover offers a lump sum payment, disability insurance provides you with regular tax-free payments amounting to 50-70% of your previous income, which means this type of cover can be more suitable for long-term conditions. To be eligible for these payouts, the policy-holder must have a disability that makes them unable to work and earn an income.

By providing you with a regular income until you return to work or retire, disability insurance can be the perfect safety net for self-employed individuals and those who are only eligible for statutory sick pay. If you don’t have a generous sick pay policy at your workplace, getting disability insurance is definitely worthwhile, as it can top up your personal independence payment (PIP) or disability living allowance (DLA - currently being phased out).

However, if you already have life and critical illness cover or adequate coverage from your employment package, you may not need separate disability insurance.

You should also be aware that this insurance typically involves a deferment period or waiting period, which is the amount of time you have to wait before your insurance starts paying out after you stop working. Setting a longer deferment period (usually up to 12 months) can make your policy more affordable, but this means you’ll need some savings to cover your living expenses during this time.